It`s nice to start out the new year with positive news for pension savers. We lowered our II pillar pension funds` management fees. The goal is to thereby increase the funds` net returns and improve pension savers` asset growth prospects.
All Estonian pension funds` returns are presented as net return. This means that the fund management fees have already been deducted from the return figures. Our pension funds have grown over the years and achieved a level of efficiency where we can lower fees and thereby, improve the return of the funds. On average, we lowered the fees by 10%, but the rate differs across the funds.
Pensions savers, who contribute to the more active funds that had the higher fees, will benefit from the lower fees the most. The management fee for the conservative fund, which already had a lower fee than the other funds, will remain the same.
The management fee rate is an annual fee deducted from the fund`s asset value. The new fees are applied from February 01. Lowering fees does not affect pension funds` investments and risk levels and Luminor customers do not have to take any steps in order for the lower fees to apply.
This is not the first time we have lowered fees. Since Luminor funds were established in 2008, the management fees have dropped by 29% on average. Earlier, it has mostly been the conservative fund fee which has been lowered. Last year, we also lowered Luminor C pension fund management fee. The next change to fees will take effect in September this year, when lower management fee and success fee regulations will enter into force. We plan to inform our customers about the changes which will take place in autumn, already in spring.